Indian stock markets witnessed a significant early trade decline, primarily influenced by disappointing quarterly earnings from HDFC Bank and a sharp increase in crude oil prices amidst escalating US-Iran tensions, creating both headwinds and potential tailwinds for investors.
Photograph: Francis Mascarenhas/Reuters
Sensex and Nifty50 Performance: Key Market Highlights Today
- Indian benchmark indices Sensex and Nifty fell significantly in early trade, with Sensex down 523.22 points and Nifty down 134.10 points.
- HDFC Bank and Axis Bank shares declined by nearly 5 per cent after disappointing quarterly earnings, particularly HDFC Bank’s Net Interest Margin (NIM).
- Brent crude oil prices surged over 2.41 per cent to USD 90.22 per barrel, fuelled by escalating tensions between the US and Iran.
- Rising crude oil prices pose a significant headwind for the Indian market, potentially impacting the rupee and Foreign Portfolio Investor (FPI) flows.
- Reliance Industries Ltd, however, saw its shares rise nearly 1 per cent after reporting record quarterly core profit and EBITDA.
Benchmark indices Sensex and Nifty tumbled in early trade on Monday, dragged by heavy selling in blue-chip HDFC Bank and a sharp spike in crude oil prices due to the ongoing tensions between the US and Iran.
The 30-share BSE Sensex tanked 523.22 points to 77,628.23 in early trade. The 50-share NSE Nifty declined 134.10 points to 24,198.25.
Winners and Losers on Dalal Street
From the Sensex pack, Axis Bank and HDFC Bank declined nearly 5 per cent after announcing their quarterly earnings over the weekend.
“HDFC Bank has disappointed, particularly on the NIM front,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Kotak Mahindra Bank, InterGlobe Aviation, Maruti and Bajaj Finance were also among the laggards from the blue-chip pack.
Bharti Airtel, Tech Mahindra, NTPC, Reliance Industries and ICICI Bank were among the gainers.
Reliance Industries Ltd, India’s most valuable company, traded nearly 1 per cent higher after it reported record quarterly core profit and EBITDA for the June quarter, powered by strong performances across its oil-to-chemicals and telecom businesses.
Expert View: What Investors Should Watch Next
“There are near-term headwinds and tailwinds for the market now. The strongest headwind is Brent crude spiking above $90 on escalating tensions between the US and Iran.
“If this trend continues, India’s vulnerability to energy shock will resurface with negative implications for the rupee and FPI flows,” Vijayakumar said.
On the positive side, the weakening of the AI trade continues in markets like the US, South Korea and Taiwan, he said, adding that this can make markets like India attractive to the FPIs.
How Global Markets Impacted Indian Equities
In Asian markets, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index quoted higher, while South Korea’s KOSPI tanked 4.35 per cent.
US markets ended lower on Friday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 376.41 crore on Friday, according to exchange data.
Brent crude, the global oil benchmark, quoted 2.41 per cent higher at $90.22 per barrel.